Take out cash with your iPhone in new ANZ deal

ANZ Bank customers will be able to withdraw cash from an eftpos terminal by tapping their iPhone, under a deal that expands what a "digital wallet" can offer a shopper.

As consumers embrace digital payments and more shun credit card debt, the bank will make eftpos available on Apple Pay, which allows customers to use their smart phone to make tap-and-go purchases.

ANZ will allow customers to make eftpos payments through Apple Pay.Credit:Josh Robenstone

The change, which comes as other banks are also rolling out Apple and android phone payments, will allow customers to choose their savings or cheque account when making a payment.

ANZ customer engagement lead Kath Bray said the change would also give customers the option to withdraw cash using an iPhone at an eftpos terminal.

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ANZ was first of the big four banks to introduce Apple Pay, in 2016, and Ms Bray said no other bank in the market was offering the latest service with eftpos.

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However, there may be a wave of competition to win customers with digital payment services, after the Commonwealth Bank said it would launch Apple Pay this month. It is believed CBA could announce a start date for Apple Pay within the next week.

As digital payments take off and use of cash declines, banks are competing to provide customers "digital wallets," and Ms Bray said the eftpos deal meant there was one less plastic card customers would need to carry with them.

Ms Bray said the volume of payments made through "digital wallets" over the peak Christmas period doubled compared with last year, and spending via digital wallets expanded beyond groceries and petrol to more discretionary purchases.

"They started to really enter the frame of the department stores, electronics - kind of more meaningful purchases," Ms Bray said.

Where customers choose to pay via eftpos, the change announced by ANZ might also lower payment costs for merchants.

Retail groups and the Reserve Bank have protested that tap and go payments sent through the higher cost credit card networks have significantly raised their costs from digital accepting payments.